Wednesday, February 3, 2016

Donor Mix

Is it better to secure funding from multiple small donors or one single huge donor?

What I really want is a deep-pocketed donor who is loyal to the cause. I want someone who never changes his or her mind. I want someone that is persuadable towards new projects and programs.
But here’s the most important part.
They have to never die.

Realistically though, choosing to secure funding from multiple small donors or one single huge donor, there are two sides here with the question.
Smaller donors mean that you’re going to have to spend more on each dollar you bring in. That’s more mailings, more admin time dealing with the donations, etc. The good side is that you are less reliant on any single donor. In addition, there is the thought that you can cultivate their giving as they grow in their careers.
One big donor is nice. The real big issue is that you become reliant on that donor. If you lose your funder for whatever reason – they have their own money issues, a relationship internally diminishes, there’s turnover at your agency, a new governor comes in and wants to prove his conservative bonafides by cutting social service – and then you have to scramble. So that means that it is nice to just have one relationship to cultivate, but there is a huge risk in dependency.
That’s why ultimately I think that the many small donors is better given the dichotomy, but ultimately you do end up with a mix of donors of many sizes. That means you still have the weaknesses of both of the two extremes, but you have more flexibility because you are not wholly dependent on one funder and you can also have a base to grow and nurture.